Africa Analysis
July 16, 2012
New food index may shame African politicians into doing more
Dianna Games for Business Day
THE bottom 25 countries on a list of 105 ranked on food security are African, with the exception of Cambodia and Haiti. Burundi, Chad and the Democratic Republic of Congo are right at the bottom of the newly launched Global Food Security Index — as they are on many other indices measuring development and issues related to the human condition. Despite it being a country with a wide divide between rich and poor, South Africa sits at a more respectable 40th place, joined in the middle of the rankings by Botswana, Ghana and most of the North African countries. The…
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July 2, 2012
Rising incomes and investors in heavenly match-up in Nigeria
Dianna Games for Business Day
AS IF more evidence was needed of Nigeria’s attraction as a major consumer market, the opening of the new Shoprite store in the capital, Abuja, a fortnight ago was an unprecedented success. Shoppers told me amid the crush that the prices were much lower than the local markets and they relished the choice of goods. More than 15000 people visited the store on the first day and the company described it as the best opening to date in Nigeria. Similarly, last year said its first Nigerian store, in the Ikeja City Mall in Lagos, enjoyed the second-best opening in turnover…
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July 2, 2012
Tension over AU job could damage SA-Nigeria relations again
Dianna Games for Business Day
AT A dinner in Johannesburg a few weeks ago, hosted by the South African chapter of the Nigerians in Diaspora Organisation, former presidents and Olusegun Obasanjo recalled the early days of the Nigeria-SA relationship that goes back to the 1960s. The two men are seen as representing the “golden age” of the relationship. Obasanjo reminded the audience that Nigerian public servants had a percentage of their salaries docked for SA’s liberation struggle and provided thousands of scholarships for black South Africans to study in Nigeria. SA regarded Nigeria as one of the frontline states in the fight against apartheid, along…
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A YOUNG Kenyan entrepreneur, asked at a conference what she would like for her country, replied that fewer potholes in Nairobi would be good. And a free and fair election next year.The woman was one of a handful of young and talented African entrepreneurs who were asked at a session at the recent World Economic Forum Africa summit to reveal their dreams and aspirations for Africa. The answers were as varied as the respondents but they went directly to the well-known problems holding Africa back and they were delivered with an honesty that is often lacking in such discussions, where…
June 14, 2012
The light and shade of Ethiopia’s nondemocratic success story
Dianna Games for Business Day
THE skyline of Addis Ababa is a sea of high-rise construction projects that stand alongside the new buildings and hotels that dot the city centre. They are rapidly squeezing out the shanties and informal shops that crammed the city when I last visited it nearly a decade ago. The herds of goats that used to roam the streets of the city quite freely are now herded onto rickety pavements to avoid the traffic nightmare that snarls up the streets from dawn to dusk. Addis symbolises the high growth rates Ethiopia has experienced over a decade and there is no doubt…
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June 14, 2012
Good future business opportunities in Francophone Africa
Dianna Games for Business Day
TALK about investing in other African countries is a hot topic in South African boardrooms but even as companies start to think more seriously about opportunities in their hinterland, most of Francophone Africa is still a bridge too far for most. The recent coups d’état in Mali, and in Portuguese-speaking Guinea Bissau, which is sandwiched between two Francophone countries, have not provided any comfort to businesses concerned about the risks of doing business in countries outside Anglophone Africa beyond those with strong links to southern Africa. Military takeovers are nothing new in West and Central Africa, where most Francophone countries…
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THE death this month of Malawi’s p resident Bingu wa Mutharika in a private clinic in Johannesburg brings to mind other African leaders whose lives ended in hospitals far from the public health systems of their home countries. Malawi’s first post-independence president, Hastings Banda, died at a private clinic in SA in 1997. Africa’s longest-serving president, Omar Bongo of Gabon, died in a Spanish hospital, while Togo’s former leader, Gnassingbe Eyadema, died in an aircraft in 2005 while being evacuated for emergency treatment abroad. Nigeria’s Umaru Yar’Adua was admitted to hospitals in Germany and Saudi Arabia, while Tanzania’s Julius Nyerere…
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March 26, 2012
SA must realise it is not investors’ only gateway into Africa
Dianna Games for Business Day
The more SA’s position as the gateway to Africa for foreign investors is eroded by a changing global order that includes changes in Africa itself, the more the debate in support of it seems to be aired in public forums locally. The issue has come back onto the agenda as the BRICS (Brazil, Russia, India, China and SA) summit in India approaches. SA’s membership of the group has lent credence to the country’s perception of itself as not just the gateway to Africa but also the representative of Africa. Critics would argue that it qualifies on neither count in any…
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March 12, 2012
Unseemly diplomatic spat could easily have been avoided
Dianna Games for Business Day
THE icy wind blowing down to SA from hot and humid Nigeria over mass yellow-fever certificate deportations this past fortnight has highlighted the tensions that lie close to the surface in this uneasy relationship between Africa’s two pivotal states. This issue highlights not the problem of health requirements as much as the negative perceptions about each other’s nationals. The yellow-fever certificate issue is not new. It has been a thorny issue between the countries for years. The question is why it has not yet been resolved by authorities on both sides of the fence. Notwithstanding SA’s apology to Nigeria for…
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February 27, 2012
Business as usual in Nigeria, in face of Boko Haram havoc
Dianna Games for Business Day
LONG queues of cars formed along a number of main roads in Abuja, Nigeria’s capital, last week. It was not just a petrol shortage after the recent withdrawal of Nigeria’s longstanding fuel subsidy that seemed to be causing the problem. The relentless search by security officials for explosives and other instruments of death and mutilation favoured by Islamic fundamentalist sect Boko Haram is another reason traffic queues are forming across the otherwise orderly city. The site of the first significant bombing in Abuja — a brazen attack inside the compound of police headquarters in June last year — was visible…
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February 13, 2012
Mining reality is far more nuanced than predators and victims
Dianna Games for Business Day
THERE is nothing quite like a mining road show to get emotions stirred up. This year’s Mining Indaba did not disappoint. Not only were Congolese mining officials beaten up by protesters for being part of an allegedly rigged election last year, but civil society was out in force with its own event, a platform from which to give the capitalists a drubbing. The civil society debate was, as always, about predators and victims, with the mining companies on one side, the communities on the other and governments somewhere in between. Political expedience — and history — tend to allow such…
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January 30, 2012
Rich rewards and myriad problems await investors in Africa
Dianna Games for Business Day
NIGERIA’s president, who has spent the year so far fighting fires, must have been relieved to see the country top the list of investment destinations unveiled in a survey of investment institutions and fund managers last week. The Economist Intelligence Unit’s survey of 158 international institutions, including pension funds, hedge funds and private banks, showed fund managers rating Nigeria (51% of respondents) along with Kenya (48%) as being the countries most likely to yield the best investment returns over the next three years. Zimbabwe, still a risky destination for investment while Robert Mugabe is in charge, is placed third on the…
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December 23, 2011
Hype about Africa as next big thing ignores harsh realities
Dianna Games for Business Day
A CLEAR signal of the change taking place in Africa is the appeal by ailing Portugal to its former colony, Angola, for investment. While Portugal’s economy is con tracting, Angola is looking at growth rates of double digits next year on a booming oil economy. According to news articles, Angolan President Eduardo dos Santos has graciously said the country is ready to assist its former ruler.Angola is not the only African country looking forward to high growth rates next year. Others include Ghana, Mozambique, Uganda, Nigeria, Ethiopia and Zambia. South Sudan, which did a pitch to US oil investors last…
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December 12, 2011
Nigeria’s history catches up with president over fuel subsidy
Dianna Games for Business Day
THE issue of the fuel subsidy in Nigeria exemplifies everything that is wrong with this giant economy operating well below its potential. It reflects years of neglect of state refineries; it underlines the irony of being Africa’s biggest oil producer but also a major importer of refined fuel; it highlights the undermining of the economy by cartels; and it shows the lip service paid by the state to development.President Goodluck Jonathan created pandemonium with his recent announcement that the historical subsidy, currently worth $7bn a year, would be removed in January next year as part of the government’s deregulation of…
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November 28, 2011
SA mimicking the rest of Africa in allowing corruption to flourish
Dianna Games for Business Day
ZAMBIAN President Michael Sata probably had the right idea when he decided to embark on a widespread firing spree in order to rid his country of corruption, given how entrenched the malaise has become in Zambia. Victims to date have included 73 district commissioners, the central bank governor, the heads of various branches of the armed forces, and the national police commissioner. Sata has dissolved the boards of the revenue and pensions authorities, fired ambassadors, parastatal chiefs and the head of the anti corruption body itself.It is too soon to say if these actions are politically motivated or if his own…
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WHEN the topic of youth leadership comes up in SA, what comes to mind are the antics of Julius Malema and his cohorts in the African National Congress Youth League. The subject has many people throwing their hands up in despair, not only at the reports of bad behaviour and self-serving tactics, but also at the lost opportunity. The youth should be changing things for the better, not reverting to the discredited and failed policies of the past. So it was a pleasant surprise to attend a conference in Addis Ababa recently hosted by the African Leadership Network (ALN) and…
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I WAS afforded a glimpse into the world of climate change last week at the 2011 African Economic Conference in Addis Ababa and observed how the debate has taken on almost religious proportions. The event, on the theme of Green Economy and Structural Transformation, and hosted by the African Development Bank (ADB), the United Nations (UN) Development Programme and the UN Economic Commission for Africa, looked at what African countries should be doing to get in step with the global green trend to counter climate change. Africa faces particular challenges, given that it suffers from so many development challenges already,…
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IN AFRICA, where doing business often involves traversing a minefield of politics, concluding a deal around election time is not a good idea. Poor institutional structures mean there is undue emphasis on personal relationships. A change of a minister or even a top bureaucrat can mark the end of a carefully constructed business deal, contract or investment. When both the president and the ruling party change, the risk factor escalates significantly. Deals that have become stuck in the works often get freed up just as elections appear on the horizon. Incumbent politicians look to see what financial advantage they can…
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EQUATORIAL Guinea is associated with many things — arbitrary detention, torture and killing of citizens, fraudulent elections and corruption. One thing it is not certainly associated with is a quest to improve the quality of human life. This makes the establishment of the Obiang Nguema Mbasogo International Prize for Research in the Life Sciences an oddity that hardly seems worth mentioning. However, the United Nations Educational, Scientific and Cultural Organisation (Unesco) is taking it seriously. In 2008, Unesco agreed to back the prize in Obiang’s name and funded by him — despite an appalling human rights record. Obiang’s plan was…
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September 19, 2011
Is Angola’s president also feeling the African winds of change?
Dianna Games for Business Day
HAVE the winds of change blowing across Africa’s undemocratic states unsettled another despot? In what came as a surprise to the nation, Angola’s president of 32 years, Jose Eduardo dos Santos, is said to have named a potential candidate to take over from him after next year’s elections. The president had seemed to be in no hurry to leave power and was instrumental in pushing through a change to the country’s constitution that abolishes presidential elections in favour of the winning party in legislative polls electing their own leader, in the same way SA does. Although the new constitution, passed…
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August 22, 2011
Retail bandwagon in Nigeria may help to change perceptions
Dianna Games for Business Day
MORE than 500 Nigerians fly to Dubai every day to shop. This translates into more than $1bn being shipped from Africa’s biggest market to the tiny emirate. That is a retailing market gap by anyone’s standards. These statistics do not include the world’s other shopping meccas so favoured by wealthy Nigerian shoppers, such as London, New York and even Johannesburg. Despite the size of this obvious opportunity, international companies in the retail sector have been slow to go into Nigeria. Most of the hesitation has been based on perceptions that it is too difficult to do business there. For those who have…
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August 8, 2011
Milking the corporate cow may deter investment in Africa
Dianna Games for Business Day
THERE was much fanfare around the Ghana listing of UK oil and gas company Tullow Oil recently. Not only was it the first listing since 2008 on the Ghana Stock Exchange, it was also the biggest, more than doubling the market capitalisation of the bourse overnight. It was also the first listing of an international oil and gas company on an African exchange. Tullow is the operator in Ghana of the large oilfield discovered in 2007, and others, with recoverable reserves of up to 1-billion barrels. Given the money it stands to make from its Ghana operations, its listing is…
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July 25, 2011
Signs of reform by Jonathan in Nigeria beyond loud promises
Dianna Games for Business Day
NIGERIA’s new president, Goodluck Jonathan, has had to perform a tough balancing act over the past fortnight. While fielding state visits from the UK Prime Minister David Cameron and German Chancellor Angela Merkel, both with large business delegations seeking investment opportunities, he has had to face off a national public service strike and deal with the growing security threat posed by radical Islamist group Boko Haram in the north of the country. The strike, over issues related to the country’s newly introduced minimum wage obligations, was averted at the eleventh hour but the uncertainty it created still disrupted the nation. The…
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June 27, 2011
Much that is not taken into account in mine ownership debate
Dianna Games for Business Day
INTERNATIONAL mining company First Quantum has paid more than R7bn in taxes to the Zambian government over the past few years. It has allocated about R70m for infrastructure in areas where it operates and is setting up an agricultural programme to support 400 farmers. It will also be the first foreign mining company to list on the Lusaka Stock Exchange.I hold no particular brief for First Quantum, or for mining companies, but it is important to balance the narrow debate on nationalisation that tends to paint resource companies as thieves and governments as victims of foreign greed. The nationalisation debate…
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June 13, 2011
Planned free trade area will challenge Africa’s politicians
Dianna Games for Business Day
IS AFRICA’s “alphabet soup” of regional economic communities (RECs) slowly becoming less complex and confusing? Currently, 27 African countries are members of two of Africa’s 14-plus regional blocs, while 18 countries are members of three blocs, with just a handful belonging to just one. This flies in the face of grand plans in the 1960s to have a United States of Africa. But the continent may be seeing some movement towards that heady ideal, with talks at an advanced stage on the creation of a free trade area (FTA) stretching from Cape to Cairo. Plans to harmonise three of the…
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May 30, 2011
African conglomerates present new competition for SA firms
Dianna Games for Business Day
DOZENS of international fund managers gathered in a Harare hotel this month to watch Zimbabwean companies parade their wares. They were not disappointed. Myriad PowerPoint presentations showed steep curves of growth, production, volumes and many other measures of economic success — albeit off a low base. The event was Imara Africa Securities’ Zimbabwe road show, which aims to show the world what the country’s companies have to offer investors.Emerging from the economic black hole that preceded “dollarisation” of the economy in 2009, Zimbabwean managers have moved quickly to rebuild operations and take advantage of improvements in the economy. A key…
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May 16, 2011
Resistance to Walmart could rebound on SA’s firms in Africa
Dianna Games for Business Day
SOUTH African companies investing in the rest of Africa have had a relatively easy time of it if one considers the rigours US retail giant Walmart has been going through in SA recently. Our local multinationals have been combing the continent’s markets looking for merger and acquisition targets, mostly unencumbered by the kind of competition law considerations Walmart, and others before it, face here. Only about 25 African countries have competition bodies and it is taking time for the concept to get traction. Earlier this year, the 23-country African Competition Forum was launched in Nairobi, which is likely to provide…
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April 18, 2011
Africa’s main business risks are legal, contractual — not political
Dianna Games for Business Day
ONE of the features most commonly associated with doing business in Africa is political risk. This is usually offset by mention of the big rewards that accompany such risk-taking. Risk assessment itself has become a growing business on the continent. As African countries diversify their economies and globalise, the risks of operating in them are not only transforming but are becoming more diverse, complex and, in some cases, unpredictable. Trade experts say that, as trade barriers fall, nontariff barriers quickly take their place and are more insidious as they are difficult to foresee and surmount. Likewise, as governments increase economic…
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April 4, 2011
Dubai shows how Africa can go beyond endless plans and talk
Dianna Games for Business Day
WHAT could a tiny patch of desert in the Middle East have to offer Africa, an area many times bigger, with every type of resource one could imagine? The question arose at the annual investment forum of the Common Market for Eastern and Southern Africa (Comesa) hosted by Dubai in April where the tiny emirate pledged to assist the regional bloc with its growth and development.For one, Dubai is a highly organised, nimble economy with an eye on the chance — something African countries have failed to achieve thus far. Despite producing little of its own, Dubai’s balance of trade with…
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March 7, 2011
African oil companies must improve standards — or lose out
Dianna Games for Business Day
WITH all eyes on Libya — and the spiralling cost of fuel caused by the closure of more than half of that country’s oil production — last week should have been an auspicious time for the release of a report on global oil companies by two international watchdogs.Transparency International and the Revenue Watch Institute’s report contained the results of a survey of the international oil industry, which fingered several national oil companies for poor disclosure about issues affecting revenue distribution, information about company structure and anticorruption programmes. Of the eight firms that fared worst, five were African state-owned companies. The…
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